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Monday, December 07, 2009

SAN FRANCISCO — Although NASA failed for the seventh year in a row to receive a passing grade from independent auditors, the U.S. space agency has made significant progress in cleaning up its financial records, Elizabeth Robinson, NASA’s newly appointed chief financial officer, told members of the House Science and Technology Committee during a Dec. 3 hearing.

The major problem preventing auditors from Ernst & Young LLP from approving NASA’s books is the space agency’s difficulty in calculating the value of its two largest assets: the space shuttle and international space station, said Paul Martin, NASA’s new inspector general. That problem was serious enough to be deemed a material weakness because it made it impossible for auditors to determine whether information included in the space agency’s balance sheets was accurate, said Daniel Murrin, a partner in New York-based Ernst & Young.

Space agency officials have been trying to determine the value of NASA’s largest assets for years, a task complicated by the size and scope of the programs, changes in NASA’s financial systems, revised federal accounting rules and the hiring of new teams of auditors. “This tale has gone on for so many years and has so many twists and turns,” Robinson told the panel.

The issue is likely to be resolved in the near future, however, because the agency that issues guidance in this area, the Federal Accounting Standards Advisory Board, published new rules in October designed to assist federal agencies, including NASA, in calculating the cost of extremely large assets based on estimates. “The adoption of the new rule provides a unique opportunity for NASA to address the issue,” Murrin said.

In addition, the space shuttle and space station will become less prominent features of NASA’s financial accounts because the programs are nearing completion. At the end of 2009, those two programs comprised approximately 77 percent of the total value of NASA’s property, plants and equipment as well as 38 percent of the space agency’s total assets, Robinson said. Since the shuttle program is scheduled to conclude in 2010, and the space station is on a depreciation schedule that ends in 2016, NASA will not have to account for the cost of those assets much longer, she added.

Nevertheless, NASA’s financial managers are not waiting until the completion of the space station program to clear up their financial records. Instead, NASA officials testifying at the hearing were cautiously optimistic that they would be able to calculate the value of the shuttle and space station programs and obtain a clean bill of health from auditors in 2010.

Robinson also assured the committee that NASA will be better able to evaluate the cost of major assets because the space agency is better able to track financial data. “It is now standard practice in contracts to acquire the accounting information we need,” Robinson said. “Our contractors have felt the burden of giving us all of the data and have worked very closely with us to ensure it is the right data. … We feel like we are on a strong footing.”

Still, NASA financial managers have two other issues to tackle. The Ernst & Young auditors cited deficiencies in NASA’s ability to calculate its environmental liability as well as the space agency’s failure to comply with the Federal Financial Management Act of 1996.

JOB SUMMARY:The Department of Housing and Urban Development (HUD) is the nation's housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and providing housing assistance for the homeless, elderly, people with disabilities, and people living with AIDS. The Department also promotes economic and community development and enforces the nation's fair housing laws.

This position is located in the Office of the Chief Financial Officer (OCFO). The OCFO establishes policies and standards to govern the development, maintenance, and operation of all financial management systems of the Department, including budget systems; accounting and related transaction systems; internal control systems; and financial reporting systems.

MAJOR DUTIES:The Deputy Chief Financial Officer (CFO), under the broad policy and administrative direction of the CFO, directs, develops, administers, and evaluates budget, accounting, financial systems, and financial management services for the Department. As the ranking career departmental financial officer, the incumbent of this position also advises the CFO on budgeting, financial management, financial systems, accounting, the financial/audit status of programs, and administrative operations of the Department. The Deputy CFO develops and communicates budgetary guidance, financial management policies/procedures, and advises the CFO and top Departmental management on the requirements and implementation of the laws and regulations applicable to the incumbent's areas of responsibility. The Deputy CFO is responsible for preparing required financial reports to the President, Congress, the Office of Management and Budget, the Department of Treasury, and the Government Accountability Office. The incumbent represents the CFO at meetings and conferences within HUD, with other Federal agencies, and with representatives of the private sector on matters of interest to the CFO.

The Department of Homeland Security (DHS) has improved management of its major management activities slightly over last year, making some progress in achieving its goals in acquisition management, according to a scorecard released Wednesday by the DHS inspector general (IG).

The scorecard found DHS making "moderate" progress in acquisition management, information technology management, and emergency management--indicating that DHS was meeting many of its goals in those areas but not quite achieving "substantial" success.

However, DHS is making only modest progress in grants management and financial management due to failing to meet many of its goals in those areas. The rating "modest" is one step below a rating of "limited" on the four-step scale used by the IG office to rate the categories in its report Major Management Challenges Facing the Department of Homeland Security.

Grants management and financial management were the weakest management areas for the department, the report found.

While FEMA made "moderate" progress in meeting the goals of successful disaster grants management, it made only "modest" progress in doing so for non-disaster grants.

For both, FEMA should exert more influence to implement improved oversight of subgrantees. But non-disaster grants management suffers from inconsistent and incomplete financial and program monitoring, the report found, partly because FEMA does not have enough grants management staffers to manage the programs.

Financial management at the department also remains weak, with the IG office granting a score of "modest" to the department's efforts. Both military and civilian financial systems at DHS face tremendous challenges.

The US Coast Guard has made little progress in tackling internal control weaknesses identified by an audit in fiscal 2008, the report said. Those weaknesses include a lack of an effective general ledger system and a lack of effective policies, procedures, and controls surrounding the financial reporting process.

While the Coast Guard plans to overcome many of these problems in future years, it lacked sufficient financial management personnel to resolve these issues in fiscal 2009, the report said.

With regard to its civilian financial systems, DHS has several internal control weaknesses in its financial reporting, particularly at FEMA and the Transportation Security Administration (TSA), the report said. Financial reporting actually deteriorated at US Customs and Border Protection (CBP) during fiscal 2009 as well, but problems at that agency are not as bad as problems at FEMA and TSA, the report characterized.

The Veterans Affairs department has let the pilot program of a new asset management system slip by two months, just five months since the agency awarded the contract, according to a new report by the Government Accountability Office. GAO attributed the problems to inadequate staffing and poor program management.

In the report, GAO blamed General Dynamics, the contractor, for falling behind schedule.

The VA awarded the contract for the Strategic Asset Management system in April to General Dynamics in April. The system is one of two major components of VA's Financial and Logistics Integrated Technology Enterprise (FLITE), an effort to produce a department-wide integrated financial and asset management system. FLITE is one of the programs that the Office of Management and Budget has designated high risk.

The second component is the Integrated Financial Accounting System (IFAS). VA awarded a program management contract for IFAS to Booz-Allen Hamilton in March, and a pilot for that system is scheduled to begin in 2010.

The VA is the second largest federal agency, with 250,000 employees. The Veterans Health Administration operates 154 hospitals, 995 outpatient clinics, 135 community living centers, 49 residential rehab centers and 232 counseling centers. But it is plagued with inefficient and unstandardized business systems that require repeated manual entries, GAO said.

“VA has for over a decade been pursuing improvements in its business processes and replacement of its existing financial and asset management systems with an integrated financial management system,” GAO said.

The lack of an integrated financial management system has been recognized as a departmental weakness since 1991, and FLITE is the second attempt to provide one. Work on the earlier proposed Core Financial and Logistics System began in 1998 and was scheduled to be completed in 2006, but the agency dropped the program in 2004 when pilot projects revealed it would be unable to support the department’s needs.

Planning for FLITE began in 2005, with full operational implementation scheduled for 2014 at a cost of $608.7 million. As of September, the VA had spent about $91 million on the program.

The department picked the Maximo Enterprise Asset Management software suite from IBM as FLITE’s Strategic Asset Management (SAM) program, and General Dynamics IT was given the contract to implement at pilot in Milwaukee. By September, the contractor had not started 11 of 34 tasks, including a security assessment, and was behind schedule on 16 of the remaining 23 tasks, GAO said.

Tuesday, December 01, 2009

The Office of Management and Budget has said little publicly about the future of the Lines of Business initiatives that began under the previous administration.

So without specific direction, agencies are taking it upon themselves to implement these initiatives whether human resources, financial management or cybersecurity.

One new major effort is the Shared Services Forum made up of 20 agency executives with some support from industry collaborating and sharing best practices.

"It was a group of people who started talking about shared services, but [the efforts] were all over the map, and we were believers in shared services and believed there needs to be some structure to make it flourish because government can't afford to continue to have everyone build their own capabilities," says Jim Williams, the commissioner of the General Services Administration's Federal Acquisition Service.

This forum is not specific to a back office function, but instead the goal is to reach governmentwide implementation of all shared services.

Williams says the forum is developing recommendations for how to expand the use of and continue to institutionalize shared services as a concept across all agencies.

"We are making recommendations that look like cloud computing so that you can finally improve some of these services-procurement, personnel, all of the different things the government does," he says.

"We're thinking of something where there is broad access to these services, where every agency doesn't have to have their own, that it is somewhat like the government health care system where there is managed competition and not the Wild Wild West. There is a common lexicon, common measurements and common way to measure customer satisfaction."

The forum will submit their recommendations to the Office of Management and Budget's chief performance officer Jeffrey Zients. Williams says the forum members hoped to meet with Zients in November to discuss the recommendations.

Williams says some estimate that agencies can save 20-percent-to-30-percent by moving administrative services to shared service providers.

The forum also likely will recommend a dashboard to measure the impact of these services.Williams says the forum didn't grow from the LOBs, but came to be from GSA, vendors and several agencies who provide shared services believing there is a need to collaborate and coordinate more effectively.

In fact, Williams says he prefers not to call these lines of business, but use the more common private sector term, shared services. He says there are some similarities, but the big difference is the maturity of the shared services approach.

Along with the forum, the Security LOB will issue two requests for proposals later this year for certification and accreditation services, and situational awareness and incident response services.

The Human Resources and Financial Management shared service efforts also are making progress by setting standards and determining how best to integrate existing systems.Several other Lines of Business, including Grants and the Budget Formulation and Execution efforts, have been less active over the past year.

About the FedCFO Publisher

Since 1994, Doug Davidson has delivered Information Technology consulting to both public and private sector clients. He is a United States citizen and a certified Project Management Professional (PMP) who's experience with federal administrative and financial management systems is in the areas of implementation, integration, operations and maintenance, federal accounting, reporting, budgeting, data extraction, data conversion, data transformation, and information synthesization.
Learn more at:
http://www.linkedin.com/in/dougdavidson
Contact the publisher:
wddavidsonjr@gmail.com